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ESG Data Changes, and So Does Your Portfolio
8 / 5 / 2019
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To ensure your portfolios are reflecting the most recent data, OpenInvest updates its Causes when the underlying data changes, and when we identify more or better data sources.

We promised transparency, and we meant it. Recently we updated some of the data underlying our Causes. Read on if you’re interested in how we make sure our Causes reflect the issues investors care about and our data partners. 

Invest in Women Leaders: Gender diversity at the very top of corporate America has long been in a sorry state: only 16% of S&P 500 company directors were women in 2008. When we first launched Invest in Women Leaders (originally called Women in the Workplace) in 2016, it had risen to 21.2%. But the message has started to sink in: all-male boards of directors are unacceptable as stewards of a company’s strategy, risk management and innovation. Thanks to shareholder campaigns like the Thirty Percent Coalition and the Thirty Percent Club, 40% of new directors elected in 2018 were women, and 87% of S&P 500 boards have at least 2 women. So we raised the bar. Now, companies must have at least ⅓ of their board seats filled by women to qualify for inclusion in our portfolios. Research shows that the first woman to be named to a board often feels like a token. When there are two, they have more influence. When a third of a group is composed of women, the group — in this case the boards of directors of some of the most powerful companies in the world — start making better decisions, and making decisions differently. Now that’s progress. 

Invest in Ethical Supply Chains: The Omidyar Network’s Humanity United (HU)  is laser-focused on eliminating forced labor. KnowTheChain (KTC), one of HU’s initiatives in this quest, has produced benchmarks for the largest global companies in three sectors riddled with forced labor problems in their supply chains: Apparel & Footwear, Food & Beverage, and Information Technology and Communications. OpenInvest relies on KTC’s scoring to build our Ethical Supply Chains cause

Divest from the Prison-Industrial Complex: To add to the deep research and advocacy done by the American Friends’ Service Committee on companies that own, operate, or do business with prisons and detention centers, we have added data from Worth Rises, which helped us identify an additional 12 companies taking part in the prison-industrial complex. 

Defund Pipelines on Indigenous Land: Formerly known as Defund the Dakota Access Pipeline, we have expanded this Cause to include several projects where pipelines have been proposed and/or are being built over indigenous land, without Free, Prior and Informed Consent (FPIC) of indigenous groups. Masazka Talks tracks both the financiers and operators of these large-scale projects. 

Reduce GHG Emissions: Formerly known as Reduce Carbon Emissions Pollution, we’re bringing on a new data source for GHG (greenhouse gas) emissions data. This source offers us more comprehensive coverage of companies around the world, as well as better estimates of the hard-to-account-for Scope 3 emissions, which for certain industries — like consumer goods– are particularly significant. (Did you know that almost 50% of the environmental impact of a pair of jeans is from washing them!)

We also added two new metrics: the list of companies that have set Science-Based Targets, an important indicator of a company’s commitment to matching its business growth to a Paris Accord-acceptable future, and the list of companies tracked by InfluenceMap, a remarkable organization which evaluates whether companies are actively lobbying against climate regulation — sometimes in flagrant contradiction to their public statements and CSR reports.

OpenInvest is constantly learning about new organizations advocating for a better future, and creating data sets to shed light on the present and spur consumer and investor action. Expect more updates as we keep your portfolios dynamically aligned with the Causes you care about.  Let us know at support@openinvest.com if you believe there’s a Cause we should add or an organization providing data that might be useful!

Investment in securities involves the risk of loss. Past performance is no guarantee of future returns. Any opinions, estimates and forecasts offered in this document constitute judgment as of the date of the materials and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information contained in this document to be reliable but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only and it is not intended to provide and should not be relied on for investment, accounting, legal or tax advice.

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